Add Your PerspectiveMarch 19, 2010

Multi-Step Dispute Resolution Clauses: 7 Reasons They Work

As we have discussed before, the best way to spend less on litigation is to have less litigation. Yes, sometimes it is better to litigate, and yes, settlement talks are hollow if you can’t walk away from the negotiation table, but most clients prefer to avoid litigation when they can. So how do you accomplish that? The multi-step dispute resolution clause is a good start.

Back in my days as outside counsel I handled a major dispute for a Fortune 500 IT services firm involving one of its larger clients, and I got plenty of time to think about how, and why, tiered dispute resolution clauses work. As soon as I moved in-house, I added these clauses to KPMG Consulting’s standard contracts, and the results were outstanding — we litigated with our clients less and got back to business sooner. This post will give you a few reasons why you might want to include a multi-step dispute resolution clause in your next major contract.

A Definition for the Multi-Step Dispute Resolution Clause

The multi-step dispute resolution clause, sometimes referred to as an “executive escalation clause,” an “escalating levels of management clause,” or a “tiered dispute resolution clause,” is often discussed but not often defined. I define it More…

Categories: ADR, Arbitration, Mediation, Negotiation, Settlement

Add Your PerspectiveMarch 4, 2010

A Settlement Lesson From “Switch”: Who Does Your Opponent Think He Is?

Longtime Settlement Perspectives readers know that I’m a big fan of Chip and Dan Heath. Their first book, Made to Stick, inspired posts back and forth with the authors on why you might not want to send a message in negotiation, and the rest of Made to Stick continues to color my view of message “stickiness” — a term the Heath brothers contributed to today’s communication lexicon.

With advance warning from Mitch Joel, I eagerly awaited my copy of the Heath brothers’ new book, Switch: How to Change Things When Change Is Hard. Like Made to Stick, Switch ostensibly has nothing to do with negotiation, but like its predecessor Switch backs into a settlement insight important to all of us.

The Identity Model of Decision Making

As with most concepts, Switch defines the identity model of decision making early on:

In the identity model of decision making, we essentially ask ourselves three questions when we have a decision to make: Who am I? What kind of situation is this? What would someone like me do in this situation? Notice what’s missing: any calculation of costs and benefits.

According to the Heath brothers, “we adopt identities throughout our lives” that More…

Categories: Communication, Mediation, Negotiation, Settlement

2 PerspectivesMarch 1, 2010

What Will She Tell Her Husband?

When was the last time you were in mediation and the other side just didn’t “get it”? You have what you need to win the case — documents that demonstrate the fraud, confirm the negligence, or whatever — but the other side just won’t go away. You offer a few dollars so you’ll be done by lunch, but she still won’t give in. Why not?

Why won’t the other side capitulate? The answer isn’t in the conference room, and it’s not in the documents. The reason your case won’t settle — at least not just yet — may be at a table far away.

The Smartest Guy at His Table That Night

I have given a lot of thought lately to a cluster of closely related negotiation concepts, each of which ultimately leads to the kitchen table:

• managing expectations;
• acceptance time;
• saving face; and
• the irrevocable offer.

Years ago a senior trial lawyer I really admire told me a story about how More…

Categories: Communication, Mediation, Negotiation

2 PerspectivesFebruary 16, 2010

In Mediation, Who Gets To Say “We’re Done”?

It’s been almost 20 years since my first mediation, and I still remember the rehearsed opening sessions from those days. Mediation after mediation began at 9:35 with a map of the day from the mediator’s manual:  This is a creative new process; mediation is confidential; today we’ll explore “win-win” approaches to settling your case; there’s a lunch menu on the credenza; don’t leave until I tell you today’s session is over. There were a few more, but you get the point.

Since those early days I haven’t given much thought to why the mediator — rather than the parties — gets to end the session. But in a recent mediation headed for impasse the lawyer on the other side almost ended the day with “I guess there’s no reason to keep talking, is there?” in a late afternoon joint session, and I understood.

Who Will Be the First to Send a Message?

Mediation is admittedly a bit awkward, if not unnatural. For its success the process requires parties and their paid advocates to stop fighting long enough to work toward a compromise acceptable to all. A series of concessions, conditioned on reaching a settlement, ends in a deal or a return to conflict.

If settlement can’t be reached, most parties and advocates immediately look for a way to turn up the heat on the other side — to send a message reinforcing the consequences of not settling. While I have said before that a “failed” mediation is a perfect time to settle halfway, the traditional response is to remind everyone that More…

Categories: Mediation, Negotiation, Tactics